February 24, 2009

2009 State of the City Speech

On February 23, 2009, San Leandro Mayor Tony Santos delivered his annual State of the City. Santos described how the economic downturn has affected San Leandro, with a 19% drop in automobile sales, a decrease in sales tax revenues, a decline in the growth of property taxes, and a $10 to $12 million budget deficit, unless changes are made.

Some of those changes have been discussed in the City's Finance Committee, including library closures, elimination of some cultural events, and hiring freezes.

Santos noted some bright spots, including construction of the Senior Center on E. 14th Street, the ninth grade campus across the street, General Foundry expanding its operations in San Leandro, construction of a third office building at Creekside Plaza, Kenworth Trucks moving to a San Leandro location, and the Kaiser Permanente facility near Interstate 880 and Marina Boulevard.

After noting the importance of the upcoming 2010 census, the Mayor closed with a welcome to the newest Councilmember, Ursula Reed, and acknowledgment of former Councilmember Surlene Grant's 10 years on the City Council.

The complete text of the Mayor's speech follows:

Mayor Anthony B. Santos
State of the City Address 2009
San Leandro – Getting Leaner and Greener

Welcome. Thank you for permitting me once again to address the state of San Leandro – what our past year has been and what is in store for 2009.

The fact that San Leandro is getting leaner and greener has a variety of connotations. We are getting leaner because much of the community is giving renewed commitments to healthier lifestyles and improved fitness. But as an organization, the City of San Leandro is getting leaner due to cuts we are making as a result of the recession.

We are getting greener thanks to the industries in San Leandro that are focusing on renewable energies and more energy-efficient technologies, while at the same time the City of San Leandro is working hard to reduce San Leandro’s carbon footprint.

Let me get the bad news out of the way first – the City of San Leandro is suffering in the recession, just as all of you are in your businesses and homes. This is the worst decline in City revenues any of us can remember. And of course, without revenues we can’t provide services. We will be seeing at least a $7.5 million deficit by the end of this fiscal year.

In previous years, we saw a 6%-8% growth in property taxes – this year we’re lucky if we’re seeing 1% to 1.5%. Our sales tax revenues are down $3.3 million since last year. Car sales alone are down 19% from this time last year, which I believe is a good deal less than the industry standard. But the forecast for 2009 is grim. In fact, predictions are that 2009 revenues from sales tax and real property tax may be the lowest San Leandro has ever seen.

Our revenues are truly a moving target. Every time we get a projection we think we can count on, it gets worse with the next report. We have been doing a good job in controlling our expenses. But be that as it may, unless significant reductions or revenue increases are made to our budget, we will be facing a $10 to $12 million deficit in July when our new Fiscal Year begins.

Of course, we’re not alone in this condition – nearly every city in America is experiencing significant drops in revenues; some worse that others.

Fortunately, as I reported to you last year, San Leandro’s past City Councils have had the foresight to insist that we maintain a multi-million dollar reserve for economic uncertainty. That allowed us to balance our budget last year with some modest cuts in services and programs. This fiscal year, which ends on June 30, will also see us drawing on those reserves to keep us in the black. However, those reserves are just like your savings account at home. Once it’s gone it’s gone, and we won’t have that money to fall back on again until the savings can be built up once more.

The City Council is taking a hard look at our use of reserves this year and may very well come to the decision that we can’t reduce those reserves any further. Our goal has always been to keep at least 20% of the General Fund budget in reserves – which is about $16 million – but we haven’t been able to hold that line and will likely be dipping into the reserves to end this year with a balanced budget.

It is looking more and more likely that we will be headed to 15% cuts throughout most of the organization. If and when that happens, everyone including you as our customers will see marked changes in the way the City does business. Positions may be eliminated, programs will be reduced or ended, and services will definitely be fewer and slower.

What we need to do is find a balance of services and programs that we can sustain in good years and bad so we get away from the rollercoaster budgeting effect. What is our essential level of service in all departments that we can always maintain?

You all have heard me say that one of my goals as Mayor has been to bring our Police Department staffing to 100 sworn officers. Sadly, we won’t see that happening this year and likely not next year either.

I still think it is a priority and it will remain my goal as long as I am Mayor, but the Police Department, like all of our other services, has to make cuts to help us balance the budget. Those cuts could very well include vacant police officer positions.

We may be able to get Federal help to pay for one officer position. There is the hope that the “Citizens Option for Public Safety” Program, better known as the Federal COPS program, will be authorized again in next year’s federal budget. That might give us funding for one officer, but that comes with strings attached with promises from the city to continue to pay those costs in future years.

But remember, we can’t have a City with just police and fire services and only skeletal libraries or parks – no one would want to live here. We have to balance our services to meet all of our community’s needs, recognizing of course that public safety is vital.

I know the press is following our budget dilemma closely. So, I’m sure you’ll be hearing how and where we need to make cuts when they come. There will be public meetings on the budget from now until June, and we certainly welcome your input as we go through this challenging process.

In early February, I had the opportunity to testify before a joint Subcommittee of the State Assembly regarding local government finance. I was able to share with them the plight of local government in this downward economy. One point I made to the Subcommittee was the urgent need to reform tax codes to allow local governments the ability to create new revenues.

One area we need to explore locally is building a closer relationship between our school districts and the City in the area of taxation. Our school districts are having budget problems just as we are. We need to collaborate on ways of improving our revenues to maintain our schools and our City services.

There is money in the President’s stimulus package to help districts through these difficult economic times. However, it probably will not be enough to offset the current financial situation of our schools. As with local governments, schools must look beyond the State for funding. We need to work together to see if we can create revenue sources from right here in San Leandro.

One idea that is floating around is the concept of building new administrative offices for the San Leandro Unified School District in the downtown area. The District is badly in need of new administrative offices, and they could certainly use the school space at Madison Elementary School for classrooms. The District moving downtown could improve the downtown and bring more shoppers and diners to the area.

Further, we know that there are many “at risk” youngsters in our community. Dr. Dennis Byas, San Lorenzo Schools Superintendent, recently paid a visit to Juvenile Hall and ran into some of his Arroyo High School students. He told me this made a very real impression on him.

I am working on developing an “at risk” kids program here in San Leandro. I am hopeful of putting together a program which will help the most troubled youngsters here in our community – those who are part of gangs and who have either been suspended or expelled from the school system. I am working with both school districts in setting up a plan which will assist these youngsters and bring them back into the mainstream of society. And, I have asked Senator Boxer for help in securing federal funding for the program.

Let us change tracks and talk about some of the healthier aspects of San Leandro.

The very successful Downtown Farmer’s Market this past summer demonstrated just how much we’re all welcoming fresh fruits and vegetables and baked goods into our homes. The Market will be back beginning on May 6, with the promise of entertainment, cooking demonstrations, and wine tasting once again, plus we will be bringing in Green events to the Market to help people learn things like composting and reducing waste. And, of course, Bayfair Center hosts a farmer’s market every Saturday, year round.

The Recreation and Human Services Guide for Spring activities asks us to “Come out and play!” and that doesn’t just mean for the kids. That means all of us – we need to get a little more play in our lives.

Just before he advanced the President’s Council on Physical Fitness, John F. Kennedy, in a speech to the National Football Foundation in 1961 said, and I quote, “We are under-exercised as a nation. We look, instead of play. We ride, instead of walk. Our existence deprives us of the minimum of physical activity essential for healthy living.”

Little did President Kennedy know that the generation of boys and girls at that time would be our mothers and fathers of today. Whether or not they learned from his efforts to get us out and moving is hard to say. What we do know is that obesity is a growing epidemic in our nation, but one that we can easily turn around with a bit more exercise and better choices in our diets.

When you have a moment, check out www.50millionpounds.com This is a dynamic program aimed at getting the nation to lose weight, get active and get healthier.

Besides the activities and events the City offers for all of us to get out and move and play or hike or dance or swim, we’re partnering with the Alameda County Transportation Improvement Authority (ACTIA) to bring a pilot program to Roosevelt Elementary and Bancroft Middle Schools to educate students and their parents about “Safe Routes to Schools.”

We need to change the paradigm of parents or grandparents driving one or two children to school each day. Students need to become comfortable in walking or riding their bicycles to school, whether it be chaperoned or with friends. We need to break up the traffic congestion around our schools in the mornings and afternoons, which is not only creating traffic safety issues, but is also adding a considerable amount of vehicle exhaust to our carbon footprint. If the program is successful, we hope to see it brought to every school in San Leandro.

ACTIA is also launching an effort to get federal transportation funding for the 2010 Campaign for Active Transportation, which promises to bring improved trails, better pedestrian and bicycle access to public transit, urban greenways, and Safe Routes for Seniors. I, for one, am excited to see this coming.

On another track, City staff is working with folks from BART, Alameda County, Union Pacific, and all of our neighboring communities, to see if there is a way a trail, or an “East Bay Greenway”, can be created beneath or next to the BART tracks from Oakland all the way down to Fremont. Think of it – a landscaped, well-paved, well lighted path from one end of the county to the other, just for bicycling and walking. What a concept! Communities on the east side of the hills have done it with the old Iron Horse Trail; we could too.

One of the City’s largest efforts towards reducing vehicle miles traveled is the Transit Oriented Development Plan for the downtown. I recognize that the Bridge housing project has created some controversy.

Granted, some people feel that the T.O.D., and particularly the Bridge project, is too much housing too soon for a community of our size. I respect their opinions, but honestly I think this is just the direction in which San Leandro needs to move to meet our housing goals and reduce our carbon footprint. And, to a great extent, the State legislature is leading us toward the TOD development with passage of Assembly Bill 32 and Senate Bill 375.

AB 32 has said that California communities must reduce greenhouse gas emissions by 2020 and beyond. The City’s objective is to reduce GHG by 25% by 2020.

SB 375 says that our land-use decisions have to be consistent with regional planning needs for housing and greenhouse gas emission reductions – in other words, reduced vehicle miles traveled.

We already know that the Association of Bay Area Governments, in its Housing Needs assessment, identifies San Leandro as needing to provide 1,630 more housing units by 2014, and nearly 600 of those should be for low- to very low-income families. The Bridge project will only get us to about 25% of this housing goal for at-market and affordable units. And to add to that projection, we’ve heard that California is expected to grow by another 20 million people by 2050.

People want to live in clean, safe, well planned communities, and San Leandro is certainly one of those communities. Some current residents bristle at the thought of our population growing. But I ask, if they chose to live in San Leandro, why can’t someone else choose and have the opportunity to live here too.

I think we need to put the concept of low- to very-low income households in perspective.
A waiter or waitress has an average salary of $18,500. Their affordable housing cost should be about $460 a month.
A retail sales person typically has an annual salary of $27,500, and their housing cost should be about $695 a month.
A middle school teacher makes about $63,000 a year, and should be spending about $1,575 a month in rent.

Now, I ask you, where can people find rents at these prices? Some exist, but not nearly enough to allow these important members of our community to be able to live in San Leandro. There just is not enough supply to meet the demand. That is why we need to champion housing projects that mix market-rate and affordable homes, and we need to do so near transportation and jobs so that vehicle trips can be reduced.

Let’s talk Green!

We got some exciting news recently. San Leandro has been invited to join the East Bay Green Corridor Partnership. This means economic development opportunities, partnerships with other cities in the East Bay, research and development opportunities in environmental technologies, jobs, and further opportunities to foster healthier cities.

The City was very proud to host the Alameda County and Cities Climate Forum in January. Elected officials and staff from every city in Alameda County and the County Board of Supervisors participated in a day-long discussion about a coordinated countywide response toward reducing the carbon footprint throughout our region.

One of the largest projects the City is starting soon is the building of a Co-Generation System at our water treatment plant. As you can imagine, everything that gets washed down or flushed through our sanitary sewer systems generates a good deal of methane gas as it is processed. With the new Co-Generation System, we’re going to be able to capture that gas, use it to power our generators, and treat the wastewater.

The new system will also accept waste grease from commercial waste haulers to enhance the process and increase the methane gas production. It is going to save energy, improve performance of our treatment systems, and generate revenue. We anticipate saving about $360,000 in power costs and eliminating more than a million pounds of CO2 emissions each year. Plus, we will be able to send any unused power back to the grid.

The water treatment plant is also recycling 97 million gallons of water a year. This is great, and we are trying to find even more efficiencies in our community.

We have had discussions with Waste Management about developing a waste-to-energy facility at the Davis Street Transfer Station. That would benefit all of Alameda County.

And we have some other impressive businesses in San Leandro that are making some remarkable strides in energy conservation and environmental protection, as well.

OSIsoft, for instance, recently won a technical innovation award for its advancements in environmental sustainability and energy management. They are developing cutting-edge technology in this field, and we are proud to have them here in San Leandro.

Clēaire on Wicks Boulevard won the Breathe California 2008 award for its development of diesel emissions control devices, virtually eliminating soot emissions from diesel motors. Clēaire is a subsidiary of Cummins West, which is also on Wicks. The City is contracting with Clēaire to retrofit our own fleet. You might want to think about it for your business fleet.

Energy Recovery, Inc. on Doolittle Drive has become a global leader in the development of ultra-high-efficiency energy recovery products and technology for desalination. They have numerous contracts around the world to help companies and nations affordably turn sea water into potable water. This technology is going to be more and more in demand, so it is good news that E.R.I. has plans to expand and move into a larger location here in San Leandro soon.

Very impressive for a small town like San Leandro.

I know in these tight times it is hard to commit to being totally green. Not all of us can go out and buy a hybrid, install solar panels on our homes, or use wind-generated energy to power our businesses. But we can all make small changes in our daily lives to be greener.

The next time a light bulb burns out, replace it with a compact florescent or LED globe. Use a tote bag instead of paper or plastic at the grocery store – my wife does. Turn your water heater down to 140° or lower. At work, copy on both sides of the paper instead of one. There are lots of simple things we can all do that save money and save energy.

Let me touch on some other business news. As President Obama said to a group of CEOs meeting at the White House recently, “Business, not government, is the engine of growth in this country,” and that holds true for San Leandro as well.

Bay Area Kenworth, the leading medium and heavy duty truck dealership in Northern California, is moving to San Leandro. They will be occupying the property at 1755 Adams where Valley Power used to be. I understand they will be open in a matter of weeks. That is new jobs coming to town.

And Creekside Office Plaza has given us the terrific news that they are poised to begin construction on their third and final office building – the parcel that is next to Davis Street. We are being told the primary tenant looks to be a service provider for disabled individuals. They were particularly drawn to this site because of its quality as a Class A office park, and because it is so close to BART. Construction could begin as soon as April 1, bringing more new jobs to San Leandro.

General Foundry is moving into a new building in Bayside Business Park. They had been operating very successfully on Merced Street near the old Albertson’s distribution site. That property was sold for the retail project next to Kaiser, so they are moving to Bayside Business Park and expanding their operations. We are very happy General Foundry is staying here and keeping jobs in San Leandro.

There is great hope all through our country that the new $789 billion economic stimulus package the President signed will bring jobs and needed improvements to our nation, our state and our city. On behalf of San Leandro, I was able to submit a list of 22 different infrastructure projects through the US Conference of Mayors totaling $78 million that are “shovel ready” and ready to create jobs for our community – projects like building a new Mulford-Marina branch library, or turning Eden Road into a true street, and about $9 million in badly needed street repairs. Our list could conceivably bring as many as 1,800 jobs to San Leandro as soon as the funding is released and projects get underway.

There are still questions to be answered about how projects will be chosen and whether or not the funding will come directly to our local governments or be funneled through the State. However, we are ready to get underway with any of these projects as soon as Washington gives us the green funding light.

Separate from the stimulus projects, the City is asking Senators Feinstein and Boxer and Congressman Stark to carry three very important projects forward for funding in the 2010-2011 federal budget. Those are continued work on East 14th Street improvements in the south area, expansion and renovation of our Police building, and construction of the “Marina Spine” which is the Bay Trail link from Marina Boulevard to Fairway Drive. If these are approved at our asking amount, we stand to get over $7 million.

And speaking of City projects, the fine weather we have had this winter has really been an advantage to the Senior Community Center project. The undergrounding work is done and the foundation has been poured. I believe we’re still on-schedule for the Center to be completed in spring 2010.

What with this project, and construction right across the street of San Leandro High School’s 9th Grade Academy and Gymnasium, which the City is helping to fund, by the way, with Redevelopment funds, there is a considerable amount of congestion and distractions occurring on East 14th Street for the next several months. On behalf of the City and the crews working out there, thank you for your patience and cautious motoring in that area. It can be challenging during the day.

We are making steady progress on a vision for the future of our shoreline and marina. The firm of Cal Coast Developers has been brought on board to work with our community and the City Council to create a development plan that will provide us with the highest and best use of this valuable property, while at the same time creating a self-sustaining development that will stop being a drain on the City’s General Fund.

The Shoreline Development Citizens Advisory Committee has been meeting regularly since December. The C.A.C. is made up of City board members and commissioners, residents, business owners, and representatives from various stakeholder groups, including boat owners, environmentalists, housing advocates, and others. We are finding these folks have a very positive vision of San Leandro and its future, and they are very committed to bringing us a quality project.

We hope to announce Town Hall meetings in late April, and we anticipate a report will come to us in the fall with recommendations as to how the Shoreline-Marina can be developed into facilities and amenities that all of our community can enjoy.

Right now, our plan is to do a modified dredging of the marina channel which will keep the boat launch ramp open to small craft. The Army Corps of Engineers will be able to do this for us hopefully sometime this year. We will still have to pay for the disposal of the dried materials at some point, but we are exploring our options.

The Plans for Kaiser Permanente to build their new medical center here in San Leandro remain on track. You can see the old distribution site has already been demolished. The last projection we have heard puts the opening sometime in 2013. I am told this will be a $1 billion project – the largest in San Leandro’s history. We are expecting that the Environmental Impact Report will be released this spring, with Planning Commission and City Council review of the design and plan development in late spring and summer.

The retail element, however, is not moving forward quite as quickly – a victim of the economic downturn, I’m sure. But it remains an important part of this project and I know Kaiser and our City staff are continuing to be optimistic on its progress.

When the Shoreline-Marina development is completed, Kaiser medical center is built and the Transit Oriented Development projects are completed, San Leandro is going to have a considerably different look to it than any of us can imagine. We need to get ready for change, because it is coming.

The Downtown Lighting and Pedestrian Improvement Project is nearly done. Our goal continues to be to make the downtown more pedestrian friendly and encourage more patrons to come to the restaurants and businesses. I think we are making great progress, if it is only one step at a time.

I don’t have any breaking news to report on the former Albertson’s site downtown. The City is still in litigation with the property owners, although there are some negotiations occurring with attempts to get a tenant on the site, at least as an interim use. Unfortunately, the economy has put the skids on those plans too. I promise you, as soon as we have news suitable for printing, we will make it public.

The San Leandro Cherry Festival is celebrating its 100th Anniversary this year. People really like the Festival being Downtown. We have planned the 100th Anniversary festival for Saturday, June 6th, including resurrecting some of the old Festival traditions, like a vintage fashion show, vintage cars, and of course lots of cherries to enjoy. Put it on your calendar; it will be a great San Leandro event.

I also need to alert you that the US Census is coming again. Yes, it has been nearly 10 years since we all did Census 2000. This year we are forming a “Complete Count Committee” to make every effort to count absolutely every person who lives in San Leandro. And, I am now a member of the US Conference of Mayors Census Task Force, representing smaller cities like ours across the country.

We had a better than average reporting rate in 2000, but we can do even better this time around. What we need to do is make contact with those hard-to-reach members of our community and help them understand how important it is that they participate in Census 2010. By hard-to-reach, I mean non-English speaking people, new immigrants to the US, seniors, and even the homeless.

Every person counted means that we have better representation in Sacramento and Washington, DC, and better opportunities to receive state and federal funding. Every person not counted could lead us to losing $2,200 in yearly federal funds. If you or someone you know has a communication network with a special segment of our population in San Leandro, I want to hear from you and find out how we can be sure these individuals and families are counted on April 1, 2010.

I will definitely focus more on Census 2010 in my address next March. I’ve heard, by the way, that the US Census Bureau is already recruiting temporary part-time census takers for the 2010 Census. The pay is good, the hours are flexible, and the work is close to home.

As I close, I want to welcome our newest member of the City Council, Councilmember Ursula Reed. We were sorry to lose Surlene Grant in District 2, but she served her District and all of San Leandro well in her 10 years on the Council. I have every confidence that Councilmember Reed will do the same.

On January 20th, we all witnessed a historic event when Barack Obama was sworn in as the 44th President of these United States. President Obama’s inaugural speech spoke of courage, determination, progress, and a renewed hope in America. I hope all of us can be part of this change, creating an exciting and dynamic future for San Leandro starting today.

Thank you to all of my colleagues on the City Council for their hard work in making San Leandro a great place to live, work and play. I am thankful for the many hours the Council spends in making certain we remain a great city.

Thank you to all of the hard working men and women of the City of San Leandro for the remarkable and dedicated job you do for this community.

Thank you for your considerate attention.

Here’s to a healthy and prosperous 2009.

Posted by Mike Katz-Lacabe at February 24, 2009 2:01 PM | TrackBack
Comments

The first cut to be made should be stop paying John Jermanis a consultant's fee to do the job Steve Hollister is supposed to be doing. We're paying over half a million for two people to act as one city manager, and they're both doing about as well as an untrained monkey.

Posted by: Frank at February 27, 2009 5:57 PM
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